2368 others answered this question

MC Question 13

A company’s sales and cost of sales figures have remained unchanged for the last two years. The following information has been noted:
Year ended 31 May 2015 31 May 2014
Inventory turnover period 45 days 38 days
Payables payment period 40 days 35 days
Receivables payment period 60 days 68 days
Current ratio 1·3 1·4
Quick ratio 1·1 1·3

The following statements have been made about the company’s performance for the most recent year:

(i) Customers are taking longer to pay and this may have contributed to the decline in the company’s current ratio
(ii) Inventory levels have decreased and this may have contributed to the decline in the company’s quick ratio

Which of the above statements is/are true?
A. (i) only
B. (ii) only
C. Both (i) and (ii)
D. Neither (i) nor (ii)